2018 Year-In-Review VC & PE Activity: CVCA Data Sneak Peek
Canadian Venture Capital
According to preliminary data (final data is targeted to be published on March 11), Canadian venture capital investment crossed the $1B mark in the fourth quarter of 2018 with $1.1B invested in 164 deals bringing the year-end total to $3.6B over 609 deals. The 2018 total is just 6% shy of the $3.8B invested last year.
$50M+ mega-deals accounted for 30% of total VC investments, down from its 39% share in 2017. Excluding mega-deals, the average deal size in 2018 was $4.2M, a 6% increase from the $4M last year. The 14 $50M+ mega-deals totaled $1.1B and included:
- Montreal-based Hopper Inc.’s $129M series D round from a syndicate of investors which included BDC IT Fund, Brightspark Ventures, Caisse de dépôt et placement du Québec (CDPQ) and OMERS Ventures Management Inc.
- Montreal-based Milestone Pharmaceuticals Inc.’s $103M series D round from an investor syndicate that included BDC Healthcare Fund and Fonds de solidarité FTQ
Canadian Private Equity
Canadian PE investment recovered from its third quarter slump and tripled to over $6B in Q4, bringing the year-end total to $22.4B over 544 deals. Although 15% lower than the $26.4B in 2017, it represents a 62% increase from the 2016 low when only $13.8B was invested. The largest deals this year included:
- $5.1B recap of GFL Environmental Inc. by a syndicate that included Ontario Teachers’ Pension Plan (OTPP)
- $5B secondary sale of Husky Injection Molding Systems Ltd. by OMERS Private Equity Inc.
- $2.7B privatization of Mitel Networks Corp. (dually listed on TSX and NASDAQ) by an investor group led by US-based Searchlight Capital Partners
It’s worth noting that combined value of $1B+ mega deals was $14.4B and exceeded the sum of all other deals combined, a phenomenon that has not occurred since 2014 driven by the blockbuster $11.8B acquisition of Tim Hortons.
The number and share of deals between $100M and $500M, typically a sweet spot for Canadian PE deal flow, dropped to 19 and 17% respectively. That is down from 28 and 22% in 2017.
The CVCA thanks the following firms who participated in the Q4 2018 survey: